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TPPA Bulletin #93

February 2017

The TPPA is dead - what next?
The United States has now formally pulled out the TPPA, killing the
agreement.

The TPPA as we know it might be dead, but the ideas it was based on and the
powerful interests behind them are not. There is no doubt that threats
similar to the TPPA will emerge in the coming months and years.

Petition against a Zombie
TPPA
On 14-15 March 2017 the New Zealand Trade Minister Todd McClay is meeting with
the remaining TPPA countries in an attempt to revive the agreement.

It’s Our Future and
our friends at Action Station have prepared petition telling Minister McClay
that we don’t want any sort of zombie TPPA. Please add your name here and share
widely.

More information on the upcoming Chile ministerial meeting the risks of a
zombie TPPA are set out later on in this bulletin.

Contents of this Bulletin
Now that the TPPA has fallen apart their are a number of possibilites about how
the TPPA governments and the corporate lobbyists that back them will reorganise
themselves. There is also an important question about how China — the
United States’ main rival for influence in the Asia-Pacific region — will
respond to the death of the agreement.

There has been a lot going on in the last couple months, on many different
fronts. So you don’t have to wade through all of it if you don’t have the
time, here’s a quick list of the topics covered:

The possibility of some sort of
zombie TPPA going ahead without the United States and why this is a bad
idea;

Donald Trump’s hint at a
one-on-one trade agreement with New Zealand;

New negotiations for an
expanded agreement with China;

An introduction and update on
both the Regional Comprehensive Economic Partnership (or “RCEP”, a set of
trade negotiations led by China);

An introduction and update on
the Trade in Services Agreement (TiSA); and — most importantly —

What you can do to stop our
Government getting New Zealand tangled-up in another mess like the TPPA.

TPPA without the United
States?
There is talk from the remaining TPPA countries about continuing with the
agreement without the United States, particularly from Australia. The New
Prime Minister, Bill English, has also indicated that he would like to pursue
this possibility, first in a press conference and more recently in a prepared statement following a meeting with
the Australian Prime Minister Malcolm Turnbull.

Trade Ministers from all the TPPA countries except the United States are due to attend a meeting in Chile on 14-15 March 2017
in an attempt to resusitate some, or all, of the TPPA.
It’s concerning that the New Zealand government still hasn’t got the message
that the TPPA was a bad idea and that New Zealanders don’t want it.
Without the United States, the TPPA is an even worse idea.

The whole point of the TPPA for New Zealand, according to its
backers, was to gain access to heavily protected US markets. The
motivation of the United States, on the other hand, was to freeze or rewrite
the rules of New Zealand and the other TPPA countries to better suit the interests
of its corporations.

New Zealand got a bad deal in the TPPA. The economic benefits that we
would potentially have gained were marginal, and the costs to the New Zealand
public and our natural environment would have been enormous.

It makes no sense for the National-led government to now consider chaining New
Zealand to a set of rules written to meet the needs of corporate America without
gaining anything in return.
As Professor Kelsey has written (also well-reported on RNZ):

The economic modelling the
government relied on to sell the TPPA last year had zero credibility and failed
to account for the costs. Take the US out of that equation and any attempt to
pitch the agreement as having net benefits to New Zealand is risible.

Similarly, former IOF co-ordinator, and current Green Party MP Barry Coates has
also put it well in a recent blog post:

Most of the very small economic gains to New Zealand from
the TPPA were going to come from trade with the USA, and these benefits were
offset by the economic costs of the deal. The economics were never worth the
risks of being sued by multinationals, the loss of government powers to
regulate business, the threats to the environment and human rights, and the
loss of our sovereignty. A TPPA without the USA makes even less sense.

The TPPA contains rules
that are specifically there because the USA insisted on them. For example, new
rules on issues like patents and copyright are not good for New Zealand, but we
were told we’d have to accept them as the cost of getting greater access to
American markets for our agricultural exports. Without the USA on board, we
face all the costs of these patent and copyright rules, but none of the
supposed benefits we were supposed to get in return.

Much of the TPPA text was
drawn from the US template. Updating it for a new deal without the USA would be
in the interests of the US, but not in our interests. We’d be better off
starting from scratch and developing a new type of fair and sustainable trade
agreement.

Finally, even conservative commentator Patrick Smellie has written a scathing
opinion piece (entitled “Enough already on the TPPA”) on Stuff.co.nz where
he rightly asks:

[W]hy our Government would
allow the political agenda in the first serious week back at work to be
dominated by a zombie trade deal. Why would Bill English, so early in the
process of stamping his identity on the prime ministership, give all that
air-time to reminding a large swathe of the population that he supports a deal
that most New Zealanders had convinced themselves was not just a bad one, but a
symbol of everything they think is going wrong with the world?

The TPPA is dead. Let’s keep it that way. It’s Our Future and
Action Station have prepared a petition to Trade Minister Todd McClay reminding
him that New Zealanders didn’t want the TPPA in the first place and that we
will resist any half-baked zombie agreement, both in the streets and in the
polling booth.

One-on-one negotiations
with the United States?
When Donald Trump pulled the US out of the TPPA, he also directed that the US :

Trump’s top trade advisor Peter Navarro has also been clear that he intends to maintain US
influence in the Asia Pacific region by negotiating one-on-one trade agreements
with the TPPA countries, mentioning New Zealand by name.

Over the last 30 years New Zealand has been a strong supporter of multilateral
(big group) or plurilateral (small group) trade negotiations — the idea being
that, as a small country, we have very little bargaining power and are better
off working in a rules-based system alongside lots of other countries.
With so little to work with, a bilateral (one-on-one) trade agreement between
New Zealand and the United States would be a disaster. A bilateral trade
agreement negotiated under the Trump administration would be worse still.
So far, Trump has hinted that a condition for any trade deals under his watch
will require protections for the profits of big US
Pharmaceutical companies (i.e. goodbye PHARMAC) and may include a
clause allowing the US to pull out on 30 days notice if it thinks fit.

Regional Comprehensive
Economic Partnership
The Regional Comprehensive Economic Partnership, or “RCEP” is an agreement
being negotiated between the 10 ASEAN countries (Brunei, Cambodia, Indonesia,
Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and
Australia, China, India, Japan, New Zealand and South Korea. Up to date
information on RCEP can be found here at the excellent www.bilaterals.org website.

Prior to the death of the TPPA, RCEP was viewed as a competing trade agreement
to shape trade in the Asia-Pacific region away from US influence and towards
China. With the US out of the TPPA, it is unknown whether the RCEP
negotiations will speed up (to fill the void left by the TPPA) or go on the
backburner (because there is no longer any need to compete against the
TPPA). The next RCEP negotiating round is scheduled to be in Japan in
late February. For now at least, there appears to be little chance of RCEP negotiations being concluded in the
near future and no negotiating texts have yet been
leaked.

Interestingly, China and South Korea — two of the major powers in the the RCEP
negotiations —have accepted invitations to attend the Chile ministerial meeting
with the TPPA parties. It is too early to draw any strong conclusions
from this, but it would appear that there is at a least a possibility of future
negotiations between the remaining TPPA countries and the RCEP grouping.

An updated trade
agreement with China
New Zealand and China have had a bilateral trade agreement in place since
2007. In November last year, the government announced that it was negotiating an expansion
of the agreement. Earlier this month both Foreign Minister Murray McCully
and Bill English met with the Chinese Foreign Minister Wang Yi
to discuss: “the upgrade of the nations' bilateral free trade agreement,
China's possible involvement in what remains of the Trans-Pacific Partnership
(TPP) negotiations, and New Zealand's role in China's One Belt, One Road strategy”.
McCully announced afterwards that a series of negotiations would begin in the
near future. The scope and timeline of these negotiations are still under
wraps.

Trade in Services Agreement
The Trade in Services Agreement (“TiSA”) is a proposed agreement to roll back
regulation of international trade in services. There are 23 countries
involved in the negotiations, the most significant being the EU (who negotiate
as a single bloc) and the US.

While TiSA is a narrower agreement than the TPPA (it doesn’t deal with border
tariffs on goods and it doesn’t include some of the worst parts of the TPPA
like Investor State Dispute Resolution) if it is agreed to, it will have a big
effect on New Zealand’s ability both to regulate in the public interest and to
support local organisations to provide service to the New Zealand public.

In a nutshell, the idea of TiSA is to make it easier for service providers
(such banks, insurance companies, internet service provider, freight companies
and healthcare providers) to sell their services to consumers in another
country. This would be done by stripping away regulations and other
practices which get in the way of corporate profits. This deregulation
would then by locked in by the TiSA agreement so that future governments are
bound to protect corporate interests rather than the public good. One of
the areas which TiSA would have a huge impact on is the regulation of financial
services. Weak regulation of banks, finance companies and insurers brought
the global economy to its knees in the 2008 global financial crisis. Now,
after countless millions of public money has been spent bailing out
corporations that were “too big to fail”, the same corporate interests are
trying to lock in the same regulatory approach which led to the GFC. TiSA
would also have huge implications for the protection and storage of online
data, which has led to strong opposition from privacy watchdogs, particulary in the EU.

TiSA was rumoured to be close to completion in late 2016. However, with Trump
coming into power it appears that no more negotiating rounds will be held until
the new US position becomes clear. The most recent leaks (above) also
reveal that the negotiating countries are still a long way apart on some
issues.

Future campaign for a
progressive trade policy
With the immediate threat of the TPPA gone, we now have an opportunity to
reframe the discussion around trade away from corporate greed, unlimited growth
and ecological blindness towards a new economic system centred around the needs
of ordinary people and environmental protection.

In the lead-up to the New Zealand Parliamentary election, It’s Our Future will
be running a campaign pushing for future trade agreements which reflect a
different and more progressive set of values than what we have experienced for
the last 30 years.

We want to hear from
youabout
what an alternative model for international trade could look like, and / or
what values would underpin this. Please send your ideas
to itsourfuturenz@gmail.com. We will share
these ideas back in upcoming bulletins and use them to develop a set of
campaign demands.